Undeterred in his vision, Gulabchand stressed that whoever invests in the project will have to develop the five towns as the project was planned
The days of zero crime are over. Garbage collection is sporadic, so litter soils the man-made lake. Storefronts are vacant. Signs of neglect are everywhere: maintenance is late or nonexistent. And that’s for the construction already done. For the unfinished building works—i.e. most of it—there is little happening.
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Lavasa was conceived by Gulabchand as India’s first private hill city in 2000, following similar private developments in the U.S. like Seaside, Florida, or the Disney development of Celebration. Now the unit of his Hindustan Construction Ltd. is struggling to repay its 41.5 billion rupees ($610 million) of debt, leaving the township to slowly slip into disrepair. Neglect has taken the Mediterranean sheen off once-bright red and yellow buildings. The cobblestone streets and stone bridges are growing moss. Sidewalks are crumbling in places.
“We are managing the project with whatever limited resources we have,” Hindustan Construction chairman Gulabchand said in an interview at the company’s sprawling office complex in an eastern suburb of Mumbai. “We are now looking forward, to seek a resolution plan.”
Curious tourists and locals looking for a break from city life once flocked to the streets of Dasve, but now they now look deserted. Many restaurants and coffee shops on the promenade facing the lake have shut. The number of visitors has dropped in the past two years, said Mukesh Kumar, a general manager at the Waterfront Shaw, a 43-apartment hotel.
Prakash Sahoo, a retiree who has been living in an apartment near the Dasve lake for four years, bemoans the seven years of hotel construction that’s still a shell just outside his balcony. And yet, Sahoo calls Lavasa India’s paradise city given its beautiful architecture, well-planned infrastructure, reliable water and power supplies, clean air and less traffic.
Erstwhile Mumbaities, David Cooper and his wife, Zerin, are worried though about the rapidly thinning security staff and recent break-ins.
Madhav Thapar, another apartment owner, is disheartened while describing the lawlessness and deterioration gripping the hill city. What’s worse, Sahoo says: The Lavasa civic body is privately managed so residents have little access to its functioning or fund management.
Plans for this retreat from modern India—including a possible IPO of the developer—came off the rails in November 2010 when the national environment and forests ministry halted construction for about a year, alleging rule violations. Its cash flow quickly dried up. Efforts to tap equity markets fell through with investors nervous of further government intervention.
About a year later, construction resumed after approvals came through to build on 21 square kilometers—almost the size of Macau. But by that point the project was cursed.
Despite getting environmental clearance, the company had lost the cooperation from government officials, Gulabchand said. Lenders balked at complexities.
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